After reading “What are Common Shares?”, read also “How are shares of stocks transferred?”
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Shares of stock designate units into which the proprietary interest in a corporation is divided.
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Common shares represent the residual ownership interest in the corporation.
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All stocks issued by the corporation are presumed equal with the same privileges and liabilities.
Shares of stock designate units into which the proprietary interest in a corporation is divided. They represent the proportionate integers or units, the sum of which constitutes the capital stock of the corporation. It is likewise the interest or right which the owner, called the stockholders or shareholder, has in the management of the corporation, and in the surplus profits and in case of distribution, in all of its assets remaining after the payment of its debts.
What are common shares? Jurisprudence says:
Common shares represent the residual ownership interest in the corporation. It is a basic class of stock ordinarily and usually issued without extraordinary rights or privileges and entitles the shareholder to a pro rata division of profits. (Commissioner of Internal Revenue vs. Court of Appeals, G.R. No. 108576 January 20, 1999)
Common shares are those which entitle its owner to an equal or pro-rated division of profits, if there are any, but without any preference or advantage in that respect over any other stockholder or class of stockholders.
The Doctrine of Equality of Shares puts forward that a common share usually carries with it the right to vote, and frequently, the exclusive right to do. It must be observed, nonetheless, that if there are more than one kind of shares issued by the corporation, each share, irrespective of classification, are equal in all respects to every other share unless the Articles of Incorporation and the certificate of stock provide otherwise.
Jurisprudence says:
Under the doctrine of equality of shares — all stocks issued by the corporation are presumed equal with the same privileges and liabilities, provided that the Articles of Incorporation is silent on such differences. (Commissioner of Internal Revenue vs. Court of Appeals, G.R. No. 108576 January 20, 1999)
Thus, where the Articles of Incorporation and the certificate of stock are silent on the question of voting rights, all issued and outstanding shares shall be considered to have the right to vote and to be voted for.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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